The charges weighed heavily on first quarter earnings and show just how severe banks think the economic fallout from the coronavirus crisis will be.

“Having lived through and been on [JP] Morgan’s operating committee during the 2008/2009 crisis, this is beyond that by some measure,” Barclays chief executive James ‘Jes’ Staley told journalists on an earnings call earlier this week.

Barclays’ economists expect UK GDP to collapse by 50% in the second quarter of 2020 and believe the economy will shrink 8% across the year. Unemployment is forecast to rise to 6.7%. The bank took a credit loss charge of £2.1bn, reflecting the bleak outlook.

Lloyds set £1.4bn to cover future losses and based its calculations on the assumption the UK economy will shrink by 5% this year. Unemployment is forecast to spike to 5.9% and house prices predicted to fall by 5%.

“We can’t be sure how long the extraordinary measures that have been put in place will last, or the toll Covid-19 will take on our society and the economy,” RBS chairman Howard Davies told investors during this week’s virtual AGM this week, “But we know the impact is likely to be stark and long-lasting.”

The Royal Bank of Scotland Group Chairman Howard Davies. (AP Photo/Matt Dunham)

“The UK firms may have been helped by the leeway granted by the Prudential Regulatory Authority with regards to the IFRS9 accounting standard, which means the banks do not face an immediate requirement to book hefty losses against loans impacted by the viral outbreak,” said Russ Mould, investment director at stockbroker AJ Bell.

“However, this does beg the question of whether there are further losses coming down the line for the Big Five, despite their rigorous tests and scenario analyses, even if they are mercifully a long way from the run rate needed to match the £57bn in loan and credit impairments booked in 2009.”